Businesses may be set up in many different ways, including:
The main benefit of setting up a business as an LP is that it provides limited partners with limited liability for the businesses’ decisions. If an individual wants to set up their business as an LP, they can consult with a local Florida lawyer who can help them set up their LP with the Florida Division of Corporations.
Unlike a limited partnership, which is required to have a unique business name, a general partnership in Florida can operate using the individual names of participants. This is an important step because the name of a limited partnership often serves as the businesses’ first impression to potential clients.
When an individual is choosing a name for their company, they should consider the following factors:
All limited partnerships in Florida are required to use one of the terms or abbreviations for limited partnership in their business name, such as:
In addition, businesses are prohibited from using terms that are typically used to refer to particular categories of organizations, such as banks or law offices, in addition to terms that refer to other types of companies, such as corporations or incorporated.
Another issue to consider is including words that describe what the company does. For example, if an individual is a realtor, they could include the phrase “real estate” in the LP name.
An individual can also emphasize that the company has particular values by using words such as “green” if the company values include being ecologically friendly.
This is an individual’s company, and they should choose a name that they are happy with. In addition, they should check to ensure that the name of the LP seems professional and sounds great when said aloud.
It is important to note that it is essential not to become overly attached to any business name prior to reserving that name with the state of Florida or formally forming the company, as it may have to be changed.
The procedure for acquiring a company name is rather straightforward in the State of Florida. An individual should check the Florida Division of Corporations’ business name database to determine if the name they want has already been taken.
If the desired company name is available for use, an individual can formally register their LP with the State of Florida to claim that name. Florida does not allow an individual to reserve the business name in advance, so an individual should be ready to form their LP when they complete this step.
An individual can register a URL in order to embrace their business name completely. A company website can easily be created with different website companies so that no other individual can use or take that name.
Every LP in the State of Florida has to name a registered agent. This is the individual or service that will receive any official documents on behalf of the business and send them to the business owner.
An LP risks losing their good standing if they do not have a registered agent in Florida. If this is true, the state has the authority to dissolve the LP.
One situation that may occur without having a registered agent is that a business owner is not informed of a lawsuit filed against them. This can result in a default judgment against the business or individual if they do not answer and defend themselves.
In order to formally establish the LP, an individual must submit a Certificate of Limited Partnership to the State of Florida to formally incorporate and register the LP. This Certificate document contains the following information:
An individual can file their Certificate of Limited Partnership in Florida online or by mailing the filled-out PDF. There is a filing fee of $965.
There may also be additional charges if an individual needs a certified copy of your Certificate of Limited Partnership or Certificate of Status. The processing period will depend on how the individual submits their Certificate.
The processing time for internet filings is usually two to three business days. Mail-in filings often take three to five business days.
During the peak filing season, these processing times may be longer.
Limited partnership agreements outline some of the important business operating principles. The State of Florida does not require LPs to have agreements.
However, it is still an important document because it outlines the specifics of the agreement between the general and limited partners. Depending on the size of the business, the industry the business works in, and other factors, the limited partnership agreement may contain different information than other types of agreements.
In general, a limited partnership agreement should include the following:
Limited partnerships must have a federal tax ID number or EIN. Many crucial tasks of LPs require using an EIN, which is the business equivalent of a Social Security Number.
If the LP needs to hire employees, it will need an EIN, as many banks need it to create business bank accounts. A federal tax ID number is also necessary for filing taxes.
The IRS will issue a free EIN for a limited partnership.
Because the State of Florida classifies LPs as pass-through corporations, all of the business income is sent to each of the partners, who will deduct that income from their individual tax filings. An individual must submit a Partnership Information Return to the Florida Department of Revenue.
To form an LP, an individual can submit an application for a Certificate of Limited Partnership on the Florida Division of Corporations website or by mailing the form to the office, as noted above. The form must include:
If the form is filled out online, the registered agent must also sign the form or provide a digital signature. The form should also specify the start date of the LP as well as the email address the LP wants to use to receive updates.
In contrast to the other states, the State of Florida does not require an LP to pay an annual tax. In addition, limited partners are protected from personal liability under Florida law if they participate in the management and control of the LP.
The State of Florida may be viewed as lenient towards plaintiffs and increasing culpability. Because of this, it is common for plaintiffs who want to sue a business to attempt to do so in Florida.
The filing fee to create an LP is also high in Florida, at $965. The LP must also pay a filing fee every year and submit an annual report.
If an individual is considering establishing a limited partnership in Florida, they should consult with a Florida corporate attorney. It is important to consult with a lawyer before creating the LP to ensure that all of the legal requirements are satisfied.
Your lawyer can assist you with completing and filing the paperwork and ensuring that your LP is created correctly and efficiently. Your attorney can also assist with creating a limited partnership agreement and representing your business during any legal cases.
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